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Stocks paused for a second session Friday, as the news flow turned almost perfectly neutral. On the plus side, first-time jobless claims nudged downward by 6,000 (to 361,000 in the week ended August 4). Economists were expecting a bounce. On the other hand, the Bloomberg Consumer Comfort Index fell this week to a two-month low.

As in the short term, so in the longer: The bullish and bearish cases are finely balanced. For reasons I’ve explained in the July and August newsletters, and in recent blogs, I continue to believe that the headline market indexes will soon strike a new multi-year high. However, I also worry that the primary uptrend dating back to March 2009 is growing old and increasingly feeble.

Thus, I’m focusing more and more on getting our investments into a strong defensive position. At some point in the next few weeks, if the yield on the benchmark 10-year Treasury note (NSYE:TNX) pops to 1.9% or higher, I may add a slug of T-bonds to the model portfolio as a hedge against a future stock market downturn.

Meanwhile, I advise you to do more selling than buying — at least until we get another decent market pullback. Among our Niche Investments, we’re saying farewell to iShares MSCI BRIC Index Fund (NYSE:BKF), an exchange-traded fund that covers the four largest emerging economies (Brazil, Russia, India and China).

BKF has bounced 11.6% (including a June dividend) from its 2012 low, set in late May. That may seem pretty good. In fact, though, BKF has barely kept pace with the S&P’s rally over the same period.

Normally, in a rebounding market, emerging bourses run well ahead of the S&P. That these big names aren’t doing so sends up a yellow flag.

What about our emerging-markets exposure in the model portfolio? I’m willing to stick with iShares MSCI Brazil Index Fund (NYSE:EWZ) and PowerShares India Portfolio (NYSE:PIN) a while longer, because these two markets, in particular, are extremely cheap by historical standards.

Nonetheless, I’m watching both of these funds with a cautious eye. We probably won’t exit them entirely, but I may recommend trimming our stake if they can’t build a head of steam soon.

On the buy side, McDonald’s (NYSE:MCD) stands out as one of the few genuine bargains in the U.S. large-cap universe. Yes, I know Wall Street is unhappy with the recent slowdown in Mickey D’s same-store sales.

But I wouldn’t count this marketing machine out. Time after time during the past decade, even during the near-depression of 2008, MCD has come out with new menu items (and permutations of old ones) that have brought the customers streaming back in. It will happen again.

In the meantime, you’re locking in a 3.2% dividend yield today, almost double what the U.S. Treasury is handing out on 10-year notes. Ten years from now, with dividend increases, I estimate that MCD will be paying you almost 7% on the money you funnel into the stock today.